Executives of hosted CRM services vendors welcome Siebels arrival to the market, while predicting that it wont succeed there. "Its good news that theyve come around and realized that this is the way to go," said Mike Doyle, chairman and CEO of Boston-based Salesnet. But Doyle predicted that Siebel would only "cannibalize" its existing market, replacing huge upfront license fees with lower monthly service fees.With the baseball playoffs in full swing, UpShot CEO Keith Raffel used a suitable metaphor. "Weve been beating traditional vendors on the roadin the heart of their business with Fortune 500 companies," said Raffel, noting that five of the largest 15 companies in North America are UpShot customers. "Now Siebel is coming to play in our ballpark. Were tough to beat at home. We have over four years of experience in selling an online Web-based solution, and Siebel is trying to play ball with a Release 1.0 product." NetSuite CEO Zach Nelson had a similar take. "Most customers make their CRM decisions driven by whether an application has the functionality they need. When a Version 1 product like Siebel goes up against a product like NetSuite that has been developed over five years, Siebel will have a very hard time competing," he predicted. Forrester Researchs Kinikin agreed that Siebel is in the unaccustomed role of playing catch-up. "What weve seen of Siebel CRM OnDemand so far seems credible and in line with the basics of other offeringsit wont blow the competition away, but its not another Sales.com," Kinikin said, in Santa Clara, Calif. "However, Siebel will be playing catch-up on advanced features, an unfamiliar position for them." Gorman promised that Siebel and IBM are pouring "unparalleled" sales and marketing resources into the deal that other vendors, including Onyx, which has its own hosting relationship with IBM, cant match. He also said Siebel and IBM sales reps will be "very incented" to sell the new offering. But Kinikin, while acknowledging the tremendous resources behind the offering, predicted that Siebel will still have issues with the sales channel. "It takes time to build the sales expertise, and Salesforce.com and others are pretty far along in building effective sales reach," she said. "Again, the big issue is commitment and focusboth Siebel and IBM have a lot of other things on their plate."Discuss this in the eWEEK forum.
"Theyre going to have to lay off three-quarters of their employees to keep up with the cost structures of this business," he said.